Alabama Health Benefit Retirement Planning


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A health decision timeline for retirement

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Alabama Health Benefit Retirement Planning

  1. 1. RETIREMENT PLANNING Health and Benefit Timing AT AGE 60 Written by JAN NEAL
  2. 2. This publication is made available by a grant provided by The Centers for Medicare and Medicaid Services and The Alabama Department of Senior Services to The South Central Alabama Development Commission, Aging and Disability Resource Center, offering State Health Insurance Program (SHIP) services to assist Medicare beneficiaries and their families to realize maximum benefits from Medicare. Warning: This booklet is being published at a particularly volatile time as it relates to insurance availability and options as health care coverage is changing nationally and on the local level at an unprecedented rate and accelerated pace. While information provided herein is general in nature, it is not intended to be a substitute for direct individual counseling. For that reason please check with your local SHIP program before relying on information contained herein and to obtain the most current information available to suit your individual needs. 2
  3. 3. State Health Insurance Progam (SHIP) Services Retirement can be a dream come true or a terrifying nightmare depending on individual circumstances. In order to maximize his or her options, a person planning for full or partial retirement needs to plan well in advance and to consider the decisions that will need to be made before that time comes. Many people do not recognize the extent to which retirement needs to be coordinated with health care coverage. This booklet is offered to give an overview of what retirees need to know in order to time retirement with maximum options. EFFECTIVE MAY 2013 WHAT TO DO AT ALL AGES 4 AT AGE 50 6 This booklet is also an invitation to you to contact the SHIP services if you have any questions or concerns about Medicare issues or other retirement issues raised in this booklet if you live in Bullock, Butler, Crenshaw, Lowndes, Macon and Pike Counties, Alabama. AT AGE 60 8 AT AGE 64 10 SHIP is a program that provides assistance to Medicare beneficiaries. Counselors are available to help those enrolled in Medicare make informed decisions regarding health insurance; are not affiliated with any insurance companies; they will not attempt to sell you insurance. Counseling is confidential. SHIP is a partnership with the Centers for Medicare and Medicaid Services, the Alabama Department of Senior Services, South Central Alabama Development Commission and Davis & Neal, Attorneys at Law. AT AND AFTER AGE 65 14 1-800-243-5463 or 1-800-270-7635 Additional Help at 1-800-Medicare 3
  4. 4. It Is Never Too Soon To Think About Retirement Planning: What to do at all ages According to the U.S. Department of Labor, the average American will spend 20 years in retirement. While the current economy may change the long accepted retirement landscape - resulting in delayed or eliminated retirement as we have known it in the past - it is a current reality that most people will spend a number of years living past their peak work performance years. That time period may be one-fourth to onefifth of a person’s life, which is a significantly high percentage of a person’s total life. Acceptance of that reality demands attention to retirement planning. Perhaps the first step in retirement planning is simply acceptance of the actual need to plan. Retirement decisions begin the moment a person enters the work force. Though most 4 people do not recognize that fact, it is important that younger workers realize that decisions today impact quality of life later in a very real way. Early planning involves saving, contributing to employer retirement plans or setting up one’s own plan if not offered by an employer. Early planning means working on, rather than off, to pay into the Social Security and Medicare systems to acquire access to those benefits if disability should happen and when retirement becomes a reality. Planning early also means being insured for health purposes and getting adequate health care to increase the likelihood of better health during retirement. Basic financial decisions during youth are the foundation for a good retirement. Paying off debt, saving and investing and becoming
  5. 5. educated in financial and health issues are essential long before a person is facing retirement. Nonetheless it is never too early or too late to make good decisions that will impact on the retirement years. Workers of all ages need to understand the type of retirement plan offered by an employer so that appropriate participation can be initiated. Multiple types of employer plans exist. Retirement plans are generally a type of employee benefit plan to provide retirement income or to defer income until termination of covered employment. Another employee benefit plan, called a welfare plan, is established to provide health, disability, death, prepaid legal, vacation benefits and other benefits of this type. Whatever type of retirement plan a person has, it is important to understand the plan structure, including how it will pay and when. Talk with your employer’s benefit manager to obtain information about how the plan works. It is important to keep all documents related to employer benefits when received for future reference. In the past Social Security mailed to workers Your Social Security Statement so that earnings posted to Social Security accounts could be verified and workers could get an idea of how much they could draw at age 62, full retirement age, at age 70 and in the event of disability. Statements also provide information on Family and Survivor benefits and eligibility for Medicare. Now that information can be obtained online at the Social Security website: ( where you can set up a mySocialSecurity account. In 2012 when The Social Security Administration announced the online statement availability it announced that the agency would still send paper statements to workers at age 60 and older who have not started drawing benefits. The agency planned to send paper statements to all workers in the year they turn 25. At all ages workers need to make sure that their earnings records are accurate and that they have been given credit for time worked for Medicare purposes. It is essential to become fully insured so that a worker has Medicare coverage for disability and/or retirement. U.S. citizens or persons who have resided legally in the U.S. for five nonstop years qualify for Medicare. The average American will spend 20 years in retirement, up to one-fourth to onefifth of his or her life “When you retire, think and act as if you were still working; when you're still working, think and act a bit as if you were already retired.” ~Author Unknown 5
  6. 6. AT AGE 50 Lay the Groundwork for an Informed Retirement Now is the time to seriously sharpen the pencil and start planning for when you can retire or will have to retire due to health reasons. Now is the time to begin looking at how you will fund retirement, where you will live, how you will have health care coverage and what you will do in the event you or your spouse should become disabled. Educate yourself concerning retirement with an emphasis on health insurance coverage. Pay down debt now. Many people are financially compromised due to credit card debt and home equity lines of credit, rendering them with no options when retirement age comes. It is tragic to see a person who borrowed to maintain their home now facing a home equity line he or she cannot afford to pay. People in this situation have to move to less expensive housing. and anticipated benefits as well as check your earnings posted to your account. You will be set to apply for Social Security and Medicare when the time comes, and you will already be familiar with the system. Begin planning for the possibility of needing long-term care. Understand how financing long-term care will effect your estate and what assets will be at risk, recognizing that nursing home care can easily cost $70,000 per year now. That cost will be higher in the future. Become knowledgeable of Medicare and Medicaid coverage of long-term care and determine if you or your spouse will qualify. If you decide to purchase long-term care insurance do it now while it is affordable. It will be a great deal more expensive if you wait until you are older. Become familiar with health insurance options, if available, through your employer when you retire and how those benefits will work with Medicare. Determine how a younger spouse will be insured for health. Understand now that even though you may get Medicare at age 65, your spouse who has not become fully insured on his or her own will not be covered through your Medicare until he or she reaches age 65. Find your Social Security card and set up your mySocialSecurity online account. You can obtain information there about your account 6 Become familiar with your income sources for retirement and explore all public benefits. Decide where you want to live and look at the cost of living realistically. Make home repairs that you can afford now without running up long-term debt that you may not be able to
  7. 7. afford when your income is lower. This will benefit you whether you stay in your home as long as possible or chose to sell it. Make sure you have clear title to your property and are free to sell it if you choose. Many people inherit property from relatives without obtaining clear title. This type of ownership is known as heir property. It means that the property passed without a will being probated or an estate administered through the probate court. While the owner/owners of heir property in fact have the right to occupy it and the duty to pay tax on the property, they cannot sell or otherwise transfer title of the property if there is not a clear legal description of the property. Sometimes a survey is necessary or other real estate and probate transactions. The important point to remember for retirement planning purposes is that you need to be able to dispose of property however you wish, so checking your deeds and title is an important element of retirement planning. This is a good time to have a power of attorney and will and to review all of your beneficiary designations and joint accounts to determine how those assets can be handled in the event of your disability or how they will pass if unchanged prior to your death. You cannot properly prepare your will without knowing what property will pass as probate property and what will pass without probate (generally jointly owned assets and real estate titled as joint tenants with right of survivorship). A power of attorney needs to name a financial decision maker for your business affairs (attorney in fact), a health care decision maker for routine medical decisions and someone to make end of life decisions if you should become permanently unconscious or terminal. Purchase pre-paid burial arrangements and make sure your wishes are designated and made known to family members. By purchasing pre-paid services, you can freeze the cost of burial at today’s prices realizing that the cost will only increase in the future. 7
  8. 8. AT AGE 60 Decide When to Draw Social Security When you turn 60 you will need to decide when you plan to apply for Social Security Retirement Benefits. To make an informed decision you need to take health care into consideration because even though you can draw Social Security at a reduced rate at 62, you will not have Medicare coverage until age 65. Considering the health care coverage for your spouse will also be part of the decision-making process. You need to determine your full retirement age. This is the age, based on the year of your birth, when you can draw full Social Security Retirement Benefits without any reduction in the amount you draw. Full Retirement Age Full retirement age is no longer 65. For persons born between 1943 and 1954, their full retirement age will be 66 years, not the traditional (original) 65. For persons born from 1955 – 1957 their full retirement age will be: Year of Birth Full Retirement Age 1943 - 1954 66 years 1955 66 years months and 2 1956 66 years months and 4 1957 66 years months and 6 8 It is important to know your full retirement age because if you draw Social Security Retirement Benefits before reaching full retirement age, you will draw reduced benefits, in fact 25 – 27.5 percent for workers and 30 – 32.5 percent for the spouse. These are significant enough percentages to persuade many people to wait until full retirement age to draw benefits. Delayed Retirement Credits Another incentive to delay drawing Social Security Retirement Benefits is the Delayed Retirement Credits available to those who wait until age 70 to take their benefits. The credits will result in an 8 percent increase in benefits
  9. 9. drawn. Earned Income Offset If you continue to work while drawing Social Security Retirement prior to full retirement age, your benefit may be reduced. This is referred to as the Earned Income Offset. If you are under the full retirement age for the entire year of 2013, Social Security will reduce your benefit amount $1.00 for every $2.00 you earn over $15,120 for the year. For the year you reach full retirement age Social Security considers the earnings you had during the months prior to turning full retirement age. If, during those months during 2013, you earn over $40,080 you will lose $1.00 for every $3.00 over $40,080. Starting the month you reach full retirement age, you will receive your full benefits no matter how much you earn. and the availability of benefits for these categories go beyond the scope of this booklet. But do be aware that spouses, children, and ex-spouses (those who remained married to the worker for ten years) may qualify for benefits. Contact your local Social Security office for information about your spouse’s potential benefits or benefits for yourself if you are the spouse or ex-spouse of a fully insured worker. Spousal and Dependent Benefits It is important to check into any potential benefits available for a spouse. There are multiple categories of Social Security benefits for survivors and dependents of workers, 9
  10. 10. AT AGE 64 Understand the Medicare Application Process The Medicare A, B & D Initial Enrollment Period The critical time to apply for Medicare is a seven month period that starts 3 months prior to your 65th birthday, the month of your 65th birthday and 3 months following your 65th birthday. This is called the Medicare Initial Enrollment Period. If you are drawing Social Security Retirement Benefits, you will automatically be enrolled in Medicare Part A and Part B. You will receive a “Welcome to Medicare” kit in the mail which will include your red, white and blue Medicare card. You will decide whether or not to opt out of Part B. If you opt out, sign the card and return it to Social Security. If you are not drawing Social Security Retirement Benefits, you will need to contact Social Security to enroll in Medicare during this Initial Enrollment Period. The Parts of Medicare First you need to understand that the parts of Medicare to make decisions about what you need. The parts are as follows: Part A is hospital coverage, a small amount of skilled nursing facility care, home health care and hospice care for the terminally ill. Part B pays for doctors' services, outpatient hospital care, and home health care that Part A does not pay for. It also pays for lab tests, medical equipment, orthotics, prosthetics, mental health services and ambulance services. Part D pays for prescription drug coverage. 10 Part C of Medicare, called Medicare Advantage, is a delivey system of managed care through private health care plans. Unless you sign up for a particular plan, you will have Original Medicare which includes Parts A and B. You will need to sign up for Part D separately with a private insurer. When you do sign up for a Medicare Advantage plan you will need to be sure that the plan provides you with the coverage you need in your geographic area and that your physicians will accept the plan for payment. Penalties for Late Enrollment If you do not accept Part B when you are first eligible (unless you are working and covered by your employer or have VA coverage) you will be penalized when you do apply for Part B. The late penalty is a 10 percent increase in the premium cost for every 12 months you did not have coverage but were eligible. The monthly premium in 2013 is $104.90 for most persons (higher for persons with income at or above $85,000 and single or $170,000 and married). So if you were eligible for Part B in 2012 and did not get it, your premium would be $115.39. If you waited two years, you would always pay 20 percent more than the monthly cost of Part B, and so on, for life. If you do not accept Part D when you are first eligible (unless you are working and covered by your employer or have VA coverage) you will be penalized when you do apply for Part D. The late penalty is 1 percent of the average monthly prescription drug premium (1 percent of $31.17 in 2013, or 31 cents) for every month you are late in applying for Part D, and the higher premium penalty will remain in effect for life.
  11. 11. Medigap Enrollment Period When you become enrolled in the Initial Enrollment Period, Medicare coverage begins as follows: For enrollment during the 3 months prior to age 65, coverage begins the month you turn 65; For enrollment the month you turn 65, coverage begins one month following the month you turn 65. For enrollment during the first month following your 65th birthday, coverage begins the third month following your 65th birthday. For enrollment during the second month following your 65th birthday, coverage begins the fifth month following your 65th birthday. For enrollment during the third month following your 65th birthday, coverage begins the sixth month following your 65th birthday. Medigap is coverage to supplement Medicare. You need this because Medicare does not pay at 100 percent. There are copayments and deductibles for which you need insurance. You have 6 months from turning 65 to enroll in a Medigap policy without the insurance company reviewing your health. Anyone can get coverage during this period. It is called the Medigap Open Enrollment. You need to find a Medicare Supplement during this time period. If you are still working when you turn 65 If you are still working when you turn 65 and are NOT drawing Social Security Retirement or Disability Benefits, you will need to enroll in the parts of Medicare you want yourself. If you are still working when you approach age 65, and if you have health insurance coverage provided by your employer, it is time to determine whether or not to at least apply for Medicare Part A. Chances are that if you work for a company with 20 full-time workers and you or your spouse have health insurance through the company for current work, you may or may not need to apply for Medicare Part A. That will depend on the type of coverage you have with the company. It is important to talk with the health insurance administrator to determine whether or not you need to apply for Medicare Part A. Some companies continue to provide benefits to currently working persons at 65, but many companies change the type of coverage with the group coverage supplementing Medicare. Only your company can provide you with this information. While most current workers will need to apply for Medicare Part A, some companies provide 11
  12. 12. Health Savings Accounts (HSA) through which the company pays contributions. Workers in those arrangements are an exception to the rule, and they may not want to be covered by Medicare Part A so that the employer will not stop making contributions to the HSA. Individual decisions will be made based on available employer health coverage, so this is a situation where each person will need to study his own individual options. And since different companies provide different health benefits it is critical to coordinate with the company what to do when you become Medicare eligible. Medicare B & D Special Enrollment Period If you were working when you turned 65 and did not enroll in Medicare Parts B and D because you had employer provided coverage, you need to enroll within 8 months after you stop working to avoid being penalized for missing the Initial Enrollment Period. You will also have the right to enroll in Medigap coverage during this time without your health record being reviewed. If you missed your Initial Enrollment Period (IEP) because you were working and covered by a group health plan, then you can use your Special Enrollment Period. If you enroll in Medicare in the fourth month following your 65th birthday, coverage can begin in the fifth month following your 65th birthday, and if you enroll in Medicare in the fifth month following your 65th birthday, coverage can begin in the sixth month following your 65th birthday. There are circumstances other than continuing to work and being covered by a group health plan that will permit a person to use a Special Enrollment Period (SEP). If you had VA health coverage you will be allowed to enroll in a drug plan under Part D during a 12 Special Enrollment Period. Other circumstances that will permit you to enroll when you missed the Initial Enrollment Period include: • • • • Moving out of the area where the plan in which you are currently enrolled will pay, Entering, leaving or living in a nursing home, OR Your plan changes and no longer serves your area, OR You become eligible for Extra Help, a program discussed later in this booklet. Medicare A and B General Enrollment Period (GEP) If you missed the Initial Enrollment Period, and the Special Enrollment Period does not apply to you, you will have to wait until the General Enrollment Period (GEP) which occurs for Medicare A and B every January 1 – March 31. Coverage will begin in July. Medicare Advantage Disenrollment Period (MADP) If you are already in a Medicare Advantage plan and decide that you want to get out of the plan and go to Original Medicare, you can make that change every year from January 1 – February 14.
  13. 13. Medicare D Open Enrollment Period (OEP) October 15 – December 7 of each year you can sign up for a prescription drug plan to work with your Original Medicare A and B or initially enroll in or change coverage from one Advantage Plan to another. Health Insurance for Spouses Medicare does not provide dependent coverage, so determining when to retire can be strongly influenced by the insurance needs of one’s spouse. It is not uncommon to see people delay retirement in order to retain health insurance coverage for dependents. There are some companies who offer retiree medical benefits that cover spouses, but it is rare. Be sure of the coverage available to you and your spouse prior to leaving employment. Many companies, especially those with more than 20 employees, are required to offer COBRA continued coverage to a spouse for 18 to 36 months following loss of coverage due to the worker retiring. Check with your employer. But COBRA is expensive, and you will have to pay the full price of the monthly premium (your share and the share your employer may have previously paid) plus an administrative fee. The Alabama Health Insurance Plan (AHIP) is offered by the state to allow individuals who are have lost coverage through an employer group plan or who have run out of COBRA coverage to obtain insurance. Check with that agency to determine application options. Another option for your spouse in the future may be to apply for coverage through the Pre-Existing Condition Insurance Plan (PCIP) program run by the U.S. Department of Health and Human Services. Though currently suspending applications as of March 2, 2013, until further notice, the program is a federal effort to provide coverage opportunities for persons with pre-existing conditions. To participate a person must be a citizen or lawfully present in the U.S., have been uninsured for six months prior to application and have a pre-existing condition or have been denied coverage because of a health condition. PCIP covers a broad range of health benefits and currently costs $359 per month for persons over age 55. PCIP has a $2,000 annual medical deductible, and a $500 annual prescription drug deductible. After meeting the deductible, the insured will pay 30% of medical costs for in-network services. While applications are currently suspended, the program is providing coverage to more than 100,000 persons nationwide. 13
  14. 14. At and After Age 65 Qualified Medicare Beneficiary (QMB) Extra Help through Medicare Savings Program (MSP) Help Paying For Medicare’s Uncovered Expenses If you think you may qualify, contact your SHIP Program There are many expenses that are not covered by Medicare. These include deductibles and copayments. To be adequately insured you either need to join a Medicare Advantage plan or obtain Medigap insurance to supplement Medicare. There are programs that can help Medicare beneficiaries pay the coverage not provided by Medicare. Medicare Savings Programs (MSP) There are programs available through The Alabama Medicaid Agency that help Medicare recipients with lower income pay for their health care expenses. These programs are based on income only. While most states also have a resource limit, Alabama does not. So no matter how much you have in savings, land you don’t live on, investments, you can qualify for MSPs if your income is low enough. Qualified Medicare Beneficiary (QMB) If your income is less than $978 for a single person or $1313 for a married couple living together, you may qualify for QMB. This program will pay your Medicare Part B premium (104.90 for most persons), and any 14 deductibles and copayments Medicare does not pay. In other words, QMB acts like a Medigap preventing those eligible from purchasing Medigap coverage. If one spouse is Medicare eligible and the other spouse is not, first make sure the applying spouse meets the single income standard, and then determine that the couple meets the couple standard. Specified Low Income Beneficiary (SLMB) If your income is less than $1169 for a single person or $1571 for a married couple living together, you may qualify for SLMB. This program will pay your Medicare Part B premium (104.90 for most persons) only. If one spouse is Medicare eligible and the other spouse is not, first make sure the applying spouse meets the single income standard, and then determine that the couple meets the couple standard. Qualified Individual – 1 (QI – 1) If your income is less than $1313 for a single person or $1765 for a married couple living together, you may qualify for QI-1. This program will pay your Medicare Part
  15. 15. B premium (104.90 for most persons) only. If one spouse is Medicare eligible and the other spouse is not, first make sure the applying spouse meets the single income standard, and then determine that the couple meets the couple standard. It is important to determine if you qualify for Extra Help first under the MSP because that program overlaps with income limits of Low Income Subsidies (see below), but there are no resource limits to meet for MSP in Alabama. For that reason a person whose resources are too high for LIS may still qualify for MSP, and he or she will get more coverage through MSP than through LIS. To calculate your income for MSP first determine if any of yours or your spouse’s income is from work using the gross pay for a job or net income for self-employment, subtract $65.00, divide by two and then add any other income. Extra Help through Low Income Subsidies (LIS) Help Paying for Prescription Drugs If you are Medicare eligible with lower income and assets, you may qualify for Extra Help in paying for prescription drugs through a program known as Low Income Subsidies (LIS). As a general rule, it means that most people who qualify will have either no premiums and deductibles or reduced premiums and deductibles, and they will pay limited copayments for each prescription drug. Due to the complexity of the Extra Help programs and the income requirement overlap between MSP and LIS , it is a general rule to first see if you qualify for MSP because it covers more and has no resource limits. The second general rule is that if you do not qualify for MSP, you should apply for LIS if your monthly income is at or below $1456.25 if single/$1958.75 if married and your resources are at or below $13,300 if single/$26,580 if married. The LIS program covers the following groups of people with FULL low-income subsidy: People eligible for Medicare and Medicaid who live in long-term care facilities or receive home and community based services. These people do not need to apply for LIS because they receive it automatically. They pay no monthly premium, no annual deductible and no copayments for drugs. People eligible for Medicare and Medicaid, who have income at or below 100 percent of the poverty level which, in 2013, is $977.50 if single and $1312.50 if married. These individuals, too, automatically receive LIS and pay no monthly premium or annual deductible. Their copayments are $1.15 per generic drug and $3.50 per name brand drug. If you have additional relatives living in your home for whom you pay more than one-half of their support, the income limit is increased by $335.00 per person.
  16. 16. People who are eligible for Medicare with income at or less than 135 percent of the poverty level, which, in 2013, is $1312.63 if single and $1764.88 if married and with resources at or less than $8580 if single and $13,620 if married. They pay no monthly premium, no annual deductible, and their copayments are $2.65 per generic drug/$6.60 per brand name drug. After reaching an out-of pocket expense of $4750 they pay nothing for drugs. If you have additional relatives living in your home for whom you pay more than one-half of their support, the income limit is increased by $452.25 per person. The LIS program covers the following group of people with PARTIAL low-income subsidy: People who are eligible for Medicare with income at or below 150 percent of the poverty level which, in 2013, is $1456.25 if single and $1958.75 if married and have resources at or less than $13,300 if single and $26,580 if married. These people need to apply. They will pay a $66.00 deductible and 15 percent for copayments. After reaching an out-of-pocket expense of $4750 they pay $2.65 for generic drugs and $6.60 for brand name drugs. If you have additional relatives living in your home for whom you pay more than one-half of their support, the income limit is increased by $469.00 to $502.50 per person depending on your income amount. When in doubt, contact the SHIP program for screening. To calculate your income for LIS first determine if any of yours or your spouse’s income is from work using the gross pay for a job or net income for selfemployment, subtract $65.00, divide by two and then add any other income. If other persons live in your home there are increased allowances for income besides yours and your spouse’s income. To calculate your resources, do not count your home or land attached to it, your vehicles, household personal property or life insurance. Call the SHIP counselors for help with any of the Extra Help Programs. If you think you may qualify you may be screened and helped in filing an application. 16
  17. 17. Coordinating Medicare with Other Insurance When you have health insurance other than Medicare, it is important to know which insurance pays first, making it the primary payer, and which pays second, making it the secondary payer. Coordination of benefits is too large a subject to be covered in detail here, but some rules of thumb for large coverage categories will be provided. Understand that the complexity of coordination of benefits requires a careful reading of all insurance documentation for detailed answers to coverage. Medicare and PEEHIP (Alabama Public Education Retirees) For those eligible for PEEHIP, Medicare becomes the primary payer, and PEEHIP secondary on the day of retirement. It is critical that the person with PEEHIP have both Medicare A and B to assure adequate coverage with PEEHIP. It is not necessary to sign up for a Medicare D prescription drug plan, however, if enrolled in PEEHIP Medicare Plus Coverage because as of January 13, 2013, PEEHIP automatically planned to enroll all Medicare-eligible members and dependents in the Medicare Generation Rx Medicare Part D program unless the person is enrolled in a separate Part D plan. Medicare and SEHIP (Alabama State Employee Retirees) For those eligible for SEHIP Medicare becomes the primary payer, so the retiree and/or dependent should have both Part A and B. Effective January 13, 2013, SEHIP prescription drug coverage for Medicare retirees changed to the SEHIP Employer Group Waiver Plan (EGWP). Medicare and TRICARE TRICARE for Life (TFL) is TRICARE’s Medicare’s wrap around coverage which is available when a TRICARE eligible individual is eligible for premium free Medicare Part A and Part B. To remain eligible for TRICARE you must be enrolled in Medicare Part A and B. Other persons who can have Medicare and TRICARE include persons who are dependents of active-duty service members who have Medicare for any reason, people under 65 with Medicare Part A because of disability or End Stage Renal Disease and with Medicare B. As a rule of thumb, Medicare pays first for Medicare-covered services, and TRICARE will pay the Medicare deductible and coinsurance as well as for any service not covered by Medicare but that is covered by TRICARE. If services are provided in a military hospital or provided by other federal health care providers, TRICARE will pay for those services. Medicare and Veterans Benefits You may qualify for both Medicare and Veterans health care benefits. If you get treatment outside the VA system, you either need coverage through Medicare or you need to get VA approval. When you have coordination questions, contact your SHIP counselor at 1-800- 2707635. 17
  18. 18. NOTES 18
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